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Exam 2: The Accounting Cycle: During the Period

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Question 21

Multiple Choice

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Which of the following is NOT possible for a business transaction?

A) Increase assets and decrease revenue.
B) Decrease assets and increase expense.
C) Increase liabilities and increase expense.

D) A) and B)
E) A) and C)

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Question 22

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Providing services to customers is recorded with a debit to Service Revenue.Providing services to customers is recorded with a credit to Service Revenue.

A) True
B) False

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Question 23

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Which of the following is true about a "debit"? I.It is part of the double-entry procedure that keeps the accounting equation in balance.II.It represents an increase to assets.III.It represents a decrease to liabilities.IV.It is on the right side of a T-account.

Childers Service Company provides services to customers totaling $3,000,for which it billed the customers.How would the transaction be recorded?

After recording each transaction,total assets must equal total liabilities plus stockholders' equity.

The full set of procedures used to accomplish the measurement/communication process of financial accounting is referred to as the:

For each transaction,there must be at least one debit amount and one credit amount.

Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase.Assets increase and liabilities increase.

If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month,did assets increase or decrease and by how much?

Consider the following list of accounts: How many of these accounts have a normal debit balance? $\begin{array} { | l | l | } \hline \text { Cash } & \text { Retained Earnings } \\\hline \text { Service Revenue } & \text { Utilities Expense } \\\hline \text { Salaries Expense } & \text { Accounts Receivable } \\\hline \text { Accounts Payable } & \text { Common Stock } \\\hline \text { Equipment } & \text { Dividends } \\\hline\end{array}$

Tyler Incorporated receives $150,000 from investors in exchange for shares of its common stock.Tyler Incorporated records this transaction with a:

An increase to an expense account is shown with a ______________.An increase to a revenue account is shown with a ______________.

Expenses have the effect of decreasing retained earnings.

Selling common stock for cash causes assets to increase and stockholders' equity to decrease.Stockholders' equity increases.

Consider the following accounts: Dividends Insurance Expense Cash Service Revenue How many of these accounts are increased with credits?

Which of the following transactions would cause a decrease in both assets and stockholders' equity?

Summer Leasing received $12,000 for 24months rent in advance.How should Summer record this transaction?

Styleson Inc.performed cleaning services for its customers for cash.These transactions would be recorded as:

Expenses normally carry a _______ balance and are shown in the ______________.

A trial balance represents the: